Risk-off European investors who are risk-averse swarm money market funds
Money market funds were the most popular investments in March, attracting €34.1 billion from European investors, who helped the industry experience positive flows.
Refinitiv Lipper data revealed that net inflows of €11 billion for the month for mutual funds and ETFs in Europe were driven by a robust demand for money market products.
"It was not surprising that March 2023 was, in general, a positive month for the European fund industry given the rather positive revisions of the economic outlooks for the major economies globally and a possible end of the interest hike cycle of central banks in the near future," said Detlef Glow, head of EMEA research at Refinitiv Lipper.
However, redemptions from mixed asset and equity strategies were the primary cause of the €23.1 billion in outflows that long-term, actively managed mutual funds experienced in March.
Despite an improving outlook, significant outflows from long-term funds and strong inflows into money market funds might indicate that European investors are still in a "risk-off" mode.
"Within the current market environment, it is somewhat surprising that European investors sold mixed-assets products since these products were European investors’ darlings in nearly all market environments in the past," said Glow.
Bond funds, which saw inflows of €1.6 billion, were the second-strongest selling category behind money market funds. While real estate funds saw sales of €700 million, "other" funds received inflows of €1.1 billion.
Mixed asset strategies led the worst-selling categories with withdrawals of €13.7 billion, followed by alternative funds and equity funds with €6.7 billion and €6 billion in redemptions, respectively.
According to firm sales, BlackRock sold the most mutual funds in March, bringing in €21.9 billion. Swisscanto came in second with €6.9 billion in sales, and Goldman Sachs came in third with €6.2 billion.
Glow pointed out that the robust demand for money market funds in March had a good effect on BlackRock, Goldman Sachs, and BNP Paribas.
By fLEXI tEAM